DEVELOPING and transition economies were the major source of gloabl FDI last year, with 70% of their investments going into other emerging economies, according to UNCTAD latest report.

As developed countries continued to confront the effects of the global financial crisis, many transnational corporations (TNCs) in developing and transition economies invested in other emerging markets, where recovery was strong and the economic outlook better, according to UNCTAD.

Overall, global FDI outflows rose last year to an estimated USD 1,346 billion compared with USD 1,189 billion the previous year. The rise reflected an improvement in corporate profits and the increasing internationalization of TNCs, according to the UNCTAD data. The statistics also indicated that the global financial crisis caused firms to rationalize their corporate structures and increase efficiencies, often by relocating business functions to areas where they could take advantage of lower costs.

Outward FDI from South, East and South-East Asia rose by more than 20 per cent in 2010, particularly from Hong Kong (China), China, the Republic of Korea, Taiwan Province of China and Malaysia. Outflows from the region’s two largest FDI sources – Hong Kong (China) and China – rose by more than USD 10 billion each, reaching estimated historical highs of USD 76 billion and USD 68 billion respectively.Chinese companies continued to be on a buying spree, actively acquiring overseas assets in a wide range of industries and countries, according to the UNCTAD survey.